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Increasing Consumerism in Health Insurance: What does it mean to payers?
By Satish Nagarajan, President, Apsana Inc.
What is the change?
Over the last 30 years health insurance was contracted and paid for by employers and the government for the benefit of consumers. Consumers have had limited choice, need or ability to impact most aspects of the health care they receive. Consumers have been able to consume health care services as a “free unlimited” commodity with some unpopular poorly understood restrictions. As such, consumers have not been able to nor required to manage the cost or quality of the healthcare they received.
Now things are changing. The cost of healthcare is rising at over two times CPI . New and expensive drugs and treatments are helping us live longer. More importantly we are living longer with chronic disease conditions which require healthcare over long periods of time. Also the advent of so called “quality of life” drugs and treatments are allowing us to enhance the comfort and quality of our otherwise healthy lives. Combine this with the aging of the population and you can see, why, as a society, we can no longer afford to treat health care as a “free unlimited” commodity. Choices have to be made and consumption has to be moderated. The basic economic policies of the Consumerism approach indicates that given informed choice, consumers will be able to dictate the economic structure of the healthcare industry to the ideal situation best suited to their needs and wants. The Consumerism approach is to make the consumer of healthcare accountable for controlling the cost of healthcare by controlling and shaping their demand.
What do consumers want?
Consumers have always wanted affordable, accessible, high quality health care. So far they have had
little direct control over how this is accomplished. With the advent of Consumerism this will change.
Consumers now require most of all information and tools to make better decisions about their health care.
…can Health Insurers do? First and foremost focus on operational excellence. Improve internal efficiencies to prepare
for a new flood of transactions. A one million member health insurer today has about 10,000 customers (assuming average
group size of 100 members). When consumers begin contracting for their own health insurance coverage this number will
increase 10-50 times. Operational excellence will allow the insurer to handle these higher volumes of transactions
while controlling costs and improving service levels.
Abstracting the EMR protects the Intellectual Property of the physicians while providing the patient and other physicians a consistent and trustable source of information. The American Health Information Management Association (AHIMA) and the American Medical Informatics Management Association (AMIA) have issued a joint position statement making a strong case for every consumer having a personal health record .
Tie financial statements like Explanation Of Benefits (EOBs) to the EHR so that consumers understand the financing of their health care services. Now, when the consumer receives an EOB (potentially as an electronic attachment to their EHR) they can better understand the relationship between the financial and medical aspects of their care.
Consider migrating to banking model for services. This means allowing consumers access to financial information regarding their health care like they access their bank accounts – via internet, customer service locations, kiosks, telephone or mail. They can pay their bills and fund their accounts the same way. They can finance their health care spending using debit or credit cards. This will also assist the consumer in their family budgeting. Now healthcare costs can be managed like any other bill.
Create innovative health insurance products that are packages of services, tools, traditional insurance and financial management components optimized for the consumer’s health status. Further since not every one in a family/group has the same health status, insurance companies should consider allowing consumers to pick a different package for each family member based on their health status. A family of a father with high cholesterol, or mother with diabetes, or a child with asthma would pick a different package for each family member under a single umbrella package.
In the end...
Educating the consumer is mandatory for the health insurer. As consumerism increases the responsibilities of the
consumer in purchasing health care services they will look for partners to assist them in their efforts. If Health
Insurers want to become valued partners to consumers in the near future they need to provide new and different products
and services to support consumers.
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